A third of backpackers and a quarter of international students in Australia are being routinely ripped off by employers who are paying them $12 an hour or less, about half the minimum wage.
A comprehensive survey of 4,322 people on temporary migrant visas, by three universities in Sydney, has painted a grim picture of systemic exploitation of visitors to Australia, with some cases detailing criminal behaviour by employers such as confiscating passports or demanding part of wages back in return for keeping a job.
The survey revealed the practice of wage theft was widespread and there had not been an effective response from the Australian government, unions or employer groups.
The study also dispels the myth that underpayment occurs simply because temporary migrants do not know the minimum wage.
One of the report’s authors, Bassina Farbenblum, said: “We found the overwhelming majority of international students and backpackers are aware they are being underpaid. However, they believe few people on their visa expect to receive the legal minimum wage.”
Underpayment was widespread across numerous industries but was especially prevalent in food services and especially severe in fruit and vegetable picking.
Two in five participants (38%) had their lowest-paid jobs in cafes, restaurants and takeaway shops. Almost a third of these were paid $12 an hour or less. Half were paid $15 or less. At the time of the survey, the legal minimum wage was $22.13 but often cafe workers are entitled to weekend rates that further raise their legal minimum wage.
In fruit and vegetable picking – which international backpackers must do for 88 days in a rural area order to qualify for a second-year working holiday visa – the degree of wage theft was extreme.
Almost one in seven participants working in fruit and vegetable picking and farm work earned $5 an hour or less. Almost a third (31%) earned $10 or less.
Other industries with poor track records were convenience stores, carwashes and work in homes such as nannying and cleaning.
The exploitation was widespread across all 107 nationalities identified in the survey but Chinese international students, who make up the bulk of international students in Australia, were particularly vulnerable to being underpaid. Some 31% were paid $12 or less. Students from other Asian countries also had high levels of underpayment.
Some 27% of students or working holiday makers from the UK reported being paid $12 or less in their lowest-paid job in Australia. Among the Irish it was 25% and among Americans 20%.
Students from European nations such as Germany or Italy fared even worse, with more than a third earning less than $12.
The report, Wage Theft in Australia, was written by Laurie Berg, a senior law lecturer at University of Technology Sydney, and Farbenblum, a senior law lecturer at University of New South Wales in Sydney, but included students and backpackers throughout Australia.
Berg said the study also showed conditions that might constitute criminal forced labour. In 91 cases, respondents had had their passports confiscated; 173 respondents were required to pay upfront “deposits” of up to $1,000 to secure a job; and 112 respondents had been asked to pay money back in cash after receiving their wages.
The study also found 44% of overseas workers were paid in cash, including two in three waiters, kitchen-hands and food servers. Paying cash is not illegal but half never or rarely receive a payslip, which is an offence. This makes it extremely difficult to seek redress and points to widespread tax avoidance by employers.
The authors said the study raised urgent concerns about the actions and resourcing required of government, business, unions and other service providers.
Ged Kearney, the president of the Australian Council of Trade Unions, said: “Our broken laws not only facilitate the theft of wages, they have facilitated big businesses importing what amounts to a slave labour class of workers on temporary visas.
“Wage theft has to stop. Workers must have quick and easy access to justice and unions which can protect their rights.”
A spokesman for the employment minister, Michaelia Cash, did not return calls requesting comment.